A class action suit has been filed against Vonage Holdings Corp. claiming that the company improperly steered consumers toward investing in its $531 million initial public offering.
Shares of the Internet phone startup have dropped by over 30% since the IPO on May 24. The company had taken the unusual step of setting aside 4.2 million IPO shares priced at $17 for customers. The stock closed at $11.98 last Friday on the New York Stock Exchange.
The suit, filed in U.S. District Court in New Jersey, claims Vonage tried to compensate for a lack of interest among institutional investors by selling shares to consumers, according to a statement issued by the law firm Motley Rice LLC.
Leave a comment